Tim Taylor reviews a racially tainted, but very revealing study of a publicly sponsored private bank targeted at a specific community. The North Dakota public state bank is often held as a quasi socialist banking model. It has the virtue of discouraging speculation but difficult to compete outside of its agricultural origins. Corruption killed Freedman's bank, even though it did initially permit African American workers and soldiers to get paid, and accumulate some wealth.
Be interesting to see if, in the wake of Glass-Steagall, credit unions could be transformed into micro-investment banks. Might be especially beneficial in rural areas, like West Virginia!
The Broken Promises of the Freedman's Savings Bank: 1865-1874
... The bank spread rapidly, and at one point had more interstate branches than any other U.S. financial institution, and approximately one in eight Blacks in the South lived in a family that held an account with the bank. ... We obtain novel data on Freedman's Savings Bank account holders from 27 branches with surviving bank records. These 107,197 account records include names of main account holders and their family members, totaling 483,082 non-unique individuals, roughly 12% of the 1870 Black population in the American South.
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